President Jeff Kennett has penned the following letter to members...
Hi there Hawkers.
I trust this finds you all well. I am sorry I have not written earlier.
A lot has been occurring at the club and the AFL that affects the club for next year.
I have publicly congratulated the AFL on providing the leadership and flexibility that allowed the code to complete the season under extraordinary conditions.
The AFL finished the year, having used most of its free cash, and that of the 12 assisted clubs. They ended the football financial year (October) as close to breakeven as possible. A good result.
For next year they are modelling crowds returning but with caution at some grounds, including the MCG to only 50%. With recent progress in the battle against COVID-19, we are hopeful of a much better result than that. With this in mind the AFL have made some substantial cuts to their and club's expenditures.
The Football Department Soft Cap for each club has been massively cut by 36% from $9.68m to $6.20m. The Soft Cap is paid by the clubs and covers Football Departments, coaches and other football staff and any training program a club undertakes.
To meet this requirement all clubs have had to let staff go, and we at Hawthorn have seen some very experienced people sadly leave the club. I am very happy to say everyone who was forced to leave has found employment elsewhere, many with our opposition clubs.
The AFL have also reduced the Total Player Payments (TPP) for season 2021, from $13.27m to $12.07m - a reduction of 9%. The Additional Services Agreements paid to players for their marketing component has also reduced by 9% to $1.09m.
They are further going to penalise Hawthorn and the other Unassisted Clubs, providing a base distribution from the AFL for 2021 of $10.38m. We at Hawthorn will have to fund the difference, approximately 20%, equating to in excess of $ 2.5m.
I have argued the 18 Clubs should each receive an equal dividend from the AFL as we provide the teams and entertainment that attracts the AFL’s considerable media and sponsorship income.
In my opinion this dividend should be in the form of the funding in full of the player payments (including both the TPP and ASA). The AFL Commission rejects the notion of that funding principle on the basis that those clubs who have been financially more successful do not require the AFL to provide considerable top-up funds.
I believe that those stronger clubs are again being discriminated against for being financially independent by the AFL, not that we oppose the AFL providing additional financial support to clubs in need.
The AFL is not an organisation that is transparent nor does it encourage clubs to be independent.
There are no KPIs established to encourage the 12 Clubs that currently receive financial support to improve their position over time. In other words, the AFL’s system supports if not encourages dependency. It is a socialist system that seeks to weaken the stronger clubs to support those clubs in need.
What they should be doing, and the system demanding, is to implement a KPI that says within three years the AFL has contributed to three more clubs joining the six that are currently termed Unassisted Clubs. That way there is pressure on the AFL to perform and deliver, and half the 18 clubs’ football departments would be genuinely solvent.
It is for this and other reasons that I support the call for an independent review of the operations of the AFL, the Commission, its membership, and its role for the next 25 years.
There was a review 30 years ago by David Crawford, and to review an organisation every 30 years is not an outlandish requirement.
12 Clubs will need to receive varying financial top-ups to be able to compete next year. Six clubs, including Hawthorn, are financially independent at this stage.
I think the AFL in preparing their financials for next year are being very conservative. However as we go back into winter, and if then, as we open Australia’s borders we see a third wave of COVID-19 as is occurring in Korea, Japan and other places around the world, the situation for all of us could be dire.
For all these reasons and our own pride, your Board will do everything, with your support to deliver a surplus every year.
This year the surplus for the club’s statutory accounts was just $65,645 but it was a surplus in what has been a very difficult year.
We are waiting for the Draft which will occur in the coming weeks.
In the meantime, the AFL have determined that for next year the number of players each team can have is a minimum of 36 players with up to six rookies, making a total player list of 44 which is in total 2 less than what we had at the completion of the 2020 season. This will not affect the clubs but is designed to reduce the costs for clubs and the AFL.
A number of our senior players retired at seasons end and some moved to other clubs. As you know, Isaac Smith has exercised his right as a free agent to accept a two-year contract at Geelong and James Frawley having retired has accepted a contract at St Kilda. We thank them both and wish them good fortune and good health for the rest of their football careers.
Alastair Clarkson is in good shape, enjoying a well-deserved break and excited about next season. It is going to be an interesting year with a range of challenges ahead for not only the club but society generally. We are all going to have to be flexible to meet whatever occurs, but Alastair, Sam Mitchell and the extended coaching team are ready to deliver.
You will have noticed we have made Sam Mitchell Senior Coach of the Box Hill Hawks. This is part of our continuing development of Sam through having him be responsible for a team of players. He will also take on the role of Head of Development, ensuring all our emerging players are developing into the Hawthorn players to challenge for our next premiership.
Kennedy Community Centre
All is on track to commence further site work early in the New Year. We have raised approximately $30 million through our Foundation, and the Federal Government recently announced a grant of $15m towards the project.
We are hopeful by year’s end the Kingston Council will approve their financial contribution to the project.
On the other hand, the State government did not allocate funds to the project in the most recent budget, even though our project had been supported by many departmental officials. While this is disappointing it is understandable given the politics here in Victoria at present. It is the community of south-east Melbourne that are really the ones who have been discriminated against more than the club.
That said we are all in good shape, optimistic and looking forward to the draft and who we secure. If we can pick up one, two or three Will Days we will be in good shape.
So, a fair bit here to digest. I hope it makes sense.
Don’t forget our AGM on Tuesday 15th of December at 6.30pm which will be held virtually if you want to be part of the meeting.
For now, thank you for your support.
Stay well and Go Hawks!